Romney’s Proposed Budget

It’s that time of year again. Governor Romney has submitted his FY ’06 budget proposal. Remember this is just the first step in the State budget process. The House and Senate will propose separate budgets and then a compromise combined congressional “Conference Committee ” budget. Then the Governor either signs or vetoes provisions of the budget, and sends it back to the legislature which may override vetoes if there are enough votes. So it is important to remember that what follows is not yet policy- but policy proposals for the fiscal year beginning July 1, 2005, which also help define the advocacy agenda for the next several months.

MassHealth

The budget also does not reverse the benefit cuts imposed on an emergency basis during the fiscal crisis. Adult dental care, dentures, eyeglasses and other services will still be unavailable. MassHealth is running a surplus, and will be returning some $200 million back to the state treasury. According to Health Care for All, this is more than enough to reverse these emergency benefit cuts that were imposed solely due to the fiscal crisis 4 years ago. On the plus side, the budget does include a $250,000 item for outreach grants to non-profit groups to encourage enrollment in MassHealth. While this a good first step, the mini-grant program had been allocated over $1 million before its elimination several years ago.

Additional MassHealth savings are obtained by:

• delaying rate increases for nursing homes
• cutting $106 million in payments to hospitals that provide care to uninsured patients.

MassHealth Essential Cap

Federal officials recently finalized a waiver of Medicaid rules that will guarantee Massachusetts nearly $600 million in US matching funds, which will help fund the budget. It also gives approval for the MassHealth Essential program, which covers unemployed adults below the poverty line, to raise its enrollment cap from 36,000 members to 44,000, and will continue it at that level next year. Last month, the program hit the 36,000 cap and began putting people on a waiting list. Now state officials will begin to enroll all of the remaining people on the MassHealth Essential waiting list.

Health Care for All says they expect the program to reach its new cap in early spring, leading to a new wait list and denied care. They argue that while the Governor continues to talk about enrolling all of those eligible for MassHealth, by capping MassHealth Essential the administration is locking out tens of thousands from coverage.

Uncompensated Care Pool

The free care pool budget is severely underfunded. The proposal reduces the already- strained pool by over $100 million. Hospitals will be facing substantial shortfalls in funds to care for uninsured patients if the Governor's budget is not amended.

Prescription Advantage

The budget includes $90 million for a reconfigured Prescription Advantage program. The language authorizes the program to fill in the holes that are in the federal Medicare drug benefit. More detail is needed before a full analysis can be conducted.

Emergency Aid to the Elderly, Disabled and Children Program(EAEDC)

Renamed Emergency Transitional Assistance.

EAEDC is the state’s program of last resort for 17,000 elderly and disabled people and some children in special circumstances. 75% of those on the program are receiving benefits because of a disability. It provides a maximum of $303/month in cash assistance and access to health insurance through the MassHealth program. The governor’s budget:

• Funds the program at $58.1 million; $11.9 million less than FY’05 appropriations ($11.5 million less than DTA’s projected expenditures for FY’05).
• Allows the Department of Transitional Assistance to implement a work requirement for disabled recipients. This will affect nearly 75% of the individuals on the program. DTA is given total discretion in setting the number of hours of work required. Presumably, recipients who do not or cannot comply with the work requirements will be sanctioned with a reduction or elimination of these meager benefits.
• Most disabled recipients would be subject to this work requirement despite the fact that to qualify for help they have been found by a medically competent authority to be suffering from a “medically determinable impairment or combination of impairments which substantially reduces or eliminates the individual’s capacity to support himself or herself”.
• The only recipients NOT subject to the work requirement are disabled recipients whose disability will last 6 months OR LESS, the elderly, and those residing in institutions.
• The income of an immigrant’s sponsor would be counted when assessing financial eligibility for EAEDC even if the sponsor does not make any money available to the recipient (currently, only actual income paid by a sponsor is counted).
• Preserves MassHealth eligibility for anyone on EAEDC before the EAEDC changes are implemented if he or she continues to meet standard in effect in June 2005.

Transitional Aid to Families with Dependent Children (TAFDC)

The Governor’s budget:

• Funds the program at $309.2 million; $8.6 million less than the FY’05 appropriation ($2.1 million less than DTA’s projected expenditures for FY ’05).
• Eliminates the exemption from the work requirements and time limits for parents whose youngest child is between 1 and 2 years of age, pregnant women in their last trimester, and many parents with disabilities.
• Allows DTA total discretion in setting the required number of work hours. The Governor has announced plans to expand the number of hours of work/week for parents whose youngest child is between 6 and 8 years from 24 to 30 hours/week. The hourly work requirements remain the same for parents whose youngest child is between 1 and 6 years or those whose youngest child is older than 8 years (20 hours/ week and 30 hours/week respectively).
• Repeals the expanded “good cause” provisions for not complying with work requirements enacted by the legislature last fiscal year.
• Establishes a 5 year LIFETIME limit on receipt of TAFDC benefits and retroactively implements this provision.

Massachusetts Rental Voucher Program

The Governor’s budget:

• Level funds the MRVP program at $24.2 million.
• Places a 36 consecutive month time limit and a 60 month life time cap on receiving MRVP assistance.
• Establishes a work requirement for all adult members in MRVP households requiring recipients whose youngest child is 1 to 5 years to work 20 hours/ week, those whose youngest child is 6 and 8 years to work 24 hours/ week and those whose youngest child is 9 or older to work 30 hours/ week.
• Participants who are over the age of 60 or who are disabled MAY be exempted from these obligations if “unsuitable under the particular circumstances”.
• MRVP tenants’ income will be re-determined every 6 months. Currently, incomes are re-determined annually.

Emergency Assistance Family Shelter Program

The Governor’s budget funds the program at $70.4 million. This is $3.2 million less than the FY’05 appropriation. The Department of Transitional Assistance states that the reduced appropriation will meet projected demand in FY’06.

Residential Assistance for Families in Transition (RAFT)

The Governor’s budget:

• Provides $2 million for this homelessness prevention program for families with children, level funding it at the FY’05 level.
• RAFT was established last year by the legislature to provide up to $3,000 in flexible funds to help families maintain their current housing or secure new units. By the end of December 2004, RAFT assisted approximately 900 families to retain their housing, obtain new housing, or otherwise avoid homelessness. Unfortunately, the funds appropriated in FY’05 are expected to run out at the end of February 2005.

Miscellaneous

The Governor’s Budget provides:

• a 22.8 percent increase for child-care services
• a roughly 3.5 percent increase for mental health
• an increase of 19 percent in family health services
• and a 137 percent increase in a program for specially trained nurses (SANE nurses) who examine and counsel sexual assault victims.

The Big Picture- Analysis

The Romney FY 06 budget proposal relies on rising revenues, healthcare savings, and the closing of corporate tax loopholes to increase overall spending by about 2.4 percent while cutting income taxes at the same time.

The key to the governor's budget is a predicted slowdown in the growth of Medicaid. Between 2001 and the current year, Medicaid spending grew by an average of roughly 10 percent a year. But the administration is estimating that this fiscal year such spending will grow by only 5 percent, and so the administration is projecting a similar rate of growth next year.

The Legislature will probably reject many of Romney's priorities; over the last two years, lawmakers have added money for social services programs and rejected his repeated calls to cut the state income tax.

Under Romney's plan the Department of Public Health would receive roughly the same amount next year as they are getting now, forcing them to find savings to deal with inflation and other rising costs. Programs within that agency, such a prostate cancer screening program, could see cuts. ''Leaving public health [at its present level] amounts to a cut, given the inflationary pressures and the fact that public health has already been so badly devastated," Geoff Wilkinson of the Massachusetts Public Health Association said, pointing to immunizations and the State Laboratory Institute as examples. According to Health Care for All, most shocking is the 75% cut to prostate cancer screening and prevention. With black men dying at a rate double that of whites from prostate cancer, this cut will only exacerbate the racial disparities in Massachusetts health care.

Thousands of people with mental illnesses will remain on waiting lists next year despite a proposed increase in the state's mental health budget, Mental Health Commissioner Elizabeth Childs said recently. Childs said Governor Mitt Romney's fiscal 2006 budget is the first in four years to avoid cuts to the department, but will not allow the Department of Mental Health to take on new clients or expand services to those already waiting.

Romney's call for an income tax cut is not new. For months, he has been urging the Legislature to reduce the state income tax to 5 percent. In 2000, voters approved a gradual lowering of the income tax rate, which was 5.85 percent at the time, to 5 percent. But in the depths of the state's fiscal crisis in 2002, the Legislature froze the rate at 5.3 percent. Now that the state's economy is rumbling back to life, Romney says, it's time to follow through.

Michael J. Widmer of the Massachusetts Taxpayers Foundation, a business-funded nonprofit that studies taxes and government spending, said the tax cut is a bad idea, especially because Romney is planning on pushing major education and healthcare initiatives that will probably add costs.

Advocates from Health Care for All asked why Romney's budget didn't include money to enroll all 106,000 of the uninsured he has said are eligible for Medicaid. Late last year, Romney proposed a plan to cover the state's 460,000 uninsured through a multipronged effort that leaned heavily on expanding Medicaid enrollment.

-Adapted from: MCHAlert@aol.com, 1/28/05, Health Care For All e-mail, 1/27/05, MIRAcoalitione-mail, 1/27/05. Boston Globe Articles from 1/27/05: “ Romney offers $23.2b budget: Relies on recovery to fund increase” By Scott S. Greenberger, Globe Staff, “ Proposal assumes healthcare costs will rise just 5.6%”By Alice Dembner, Globe Staff  and Globe Editorial “ A wait-and-see budget”, Boston Globe article “Mental Health Budget Won’t Allow Growth”, 2/1/05.

01/2005